Sometimes investment banking firms allocate
shares of hot issues to the personal accounts of corporate
officers with the intentions of generating more future
business. The corporate officers then sell the issues
that day to make a quick profit. This is known as:
a) Spinning
b) Churning
c) Short-selling
d) Twisting

A:

The
correct answer is a)
Spinning is the act of selling hot issues to the
personal accounts of corporate officers which in
turn sell the issues immediately that day to make
a quick profit. The intention of this strategy is
to build trust with the officials in hopes of influencing
them to direct future business to the firm.